1. "Price stability is the sole goal of any government's monetary policy." Please evaluate this statement and explain why price stability can influence so many other economic factors.

2. When and why would the Federal Reserve Bank cut the federal reserve rate and when would it increase it? What effect on the economy does each have?

3. What is quantitative easing? How is it accomplished and when does the government generally seek to accomplish it?

4. In what way to tools that fight recessions and tools that fight inflation often conflict with one another? Explain.